Demand for haven assets saw a pickup as stock markets in Asia, Europe and the U.S. came under pressure after commodity prices fell. The Nikkei 225 shed around 2% of its value, while the Dow Jones Industrial Average and the S&P 500 teetered between gains and losses before closing slightly lower.

A tepid reading on unit labor costs during the third quarter also helped to attract a bid in Treasurys as it added to evidence that tightening labor markets were not leading to higher wage gains and inflation. Unit-labor costs were revised down to a 0.2% decline from an earlier 0.5% gain.

What did market participants say?

"In short, productivity continues to show improvement recently, but more headline-grabbing perhaps is the weakness in unit labor costs. The weakness will undoubtedly be cited by many as evidence that worries about overheating due to a tight and tightening labor market are misplaced," said Jim O'Sullivan, chief U.S. economist for High Frequency Economics.

What else is on investors' radar?

Bond investors saw key economic data that suggested the U.S. growth was on a steady path. The ADP report on private-sector employment Wednesday showed businesses added 190,000 jobs in November , down from 235,000 in October. Meanwhile, the final revision to the third-quarter productivity numbers left it unchanged at 3%. Economists polled by MarketWatch had forecast productivity to hit 3.3%.

Economists say that productivity is arguably the key long-term driver of a country's growth prospects and is needed to unlock the further wage gains that could give the Federal Reserve the encouragement to raise rates several times in 2018. The central bank has insisted tight labor markets would stoke inflationary pressures and the recent weakness in consumer prices would prove fleeting.

President Donald Trump said a government shutdown "could happen" this week. Congress has to pass a short-term spending bill by midnight Friday to keep the federal government open.